Guixols´ investment strategy combines a 'classic' value approach with real world observation and experiences that certain companies are able to reinvest free cash flow at rates of return well above cost of capital, and this for sustained periods of time. This is possible for instance because of high barriers-to-entry (to new competitors), high switching costs for (captive) customers, intellectual property protection...

Companies that can reinvest cash flow at returns well above cost of capital are intrinsically more valuable than companies that can only reinvest at cost of capital. And the more significant the 'good' investment opportunities are, the more value can be created. But also, the more they reduce, in the short term, reported free cash flow and earnings. This apparent contradiction - less free cash flow, but more value - can confuse markets and when that happens, great 'quality' value opportunities emerge for patient, long term investors. 

Value investing is not only about screening for stocks with a low price earnings ratio.